World to add less clean energy capacity this year, renewables agency chief says
The International Renewable Energy Agency has flagged a concerning trend, projecting a reduction in global clean energy capacity additions for 2026. This marks the first decline in five years, attributed primarily to deficient transmission infrastructure and trade barriers. The implications are significant for FX markets, especially for currencies heavily tied to energy exports and investments, as this shift signals potential slower growth in economies emphasizing renewable transitions.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). [PUBLISHER']s view aligns more closely with the upper third — JPMorgan and ING share that framing.
How firms align
JPMorgan’s stance supports a more optimistic outlook, maintaining a target of 1.10 for the upcoming March 2026 tenor, reflecting their belief in resilient demand for renewables. Conversely, BofA’s target of 1.04 indicates a more bearish view, contrasting with the broader narrative of growth even amid barriers.
What the data shows
Recent forecast adjustments show a tightening of growth expectations, with insights highlighting that infrastructure deficits could hinder renewables, impacting FX driven by energy transitions. For further details, refer to /research/renewable-energy-outlook.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Global clean energy capacity set to decline for the first time in 5 years.
- 02Renewable energy momentum may affect currencies linked to energy exports.
- 03Watch for infrastructure improvements as a catalyst for currency volatility.
Market implications
Traders should monitor the EUR/USD around the 1.075 level for indications of shifts in market sentiment due to renewable energy developments. Upcoming infrastructure announcements could prompt volatility as they relate to economic forecasts.
Risks to this view
A swift improvement in transmission infrastructure or significant policy shifts supporting clean energy would undermine the bearish outlook and compel a reassessment of currency positions in the sector.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Sources & References
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